The settlement site of Kunda Lammasmägi and its surroundings have been studied extensively since the 19th century. Nevertheless, a number of questions on the nature of the settlement and its surrounding environment remain unanswered. In this paper, we will present paleolandscape reconstructions based on geology, palynology, micro- and macrofossil analysis and radiocarbon datings published by various researchers. We will also include recent LiDAR data, results of the fieldwork carried out by the authors at Kunda Lammasmägi and along the paleolake shoreline, as well as the results of the analysis of archaeological material accumulated from 1933 to 2016 with an emphasis on lithic finds and pottery. Recent fieldwork, digital elevation modelling and typo-chronological review of the finds have clarified issues, such as the extent of stratigraphical mixing, association between the settlement stages and the paleolake development, and the human activity in other parts of the paleolake depression. Three distinct phases can be observed in the development of environmental conditions of the Kunda depression: 1) until the beginning of the Atlantic pollen assemblage zone, Lammasmägi existed as an island in the southern part of a postglacial lake; 2) during the first half of the Atlantic, the water level dropped, a remnant lake was left in the northern part, and Lammasmägi existed as a seasonal island or higher place in the marsh; 3) by the beginning of the second half of the Atlantic, the remnant lake was partly overgrown and Lammasmägi was surrounded by dry land. The analysis of archaeological material enabled the differentiation of four settlement phases: 1) in the Early Mesolithic I and II; 2) in the Late Mesolithic I; 3) in the Late Mesolithic II; and 4) in the Neolithic until the beginning of the Bronze Age. The first two settlement stages can be associated with the paleolake, while the subsequent two are associated with the present-day Kunda River and other streams. [ABSTRACT FROM AUTHOR]